Friday, July 28, 2006

California's Ellis Act allows a landlord to "go out of business" (out of the rental housing business) and thereby evict all of the tenants of a building. It is clearly necessary to allow some mechanism for a landlord to go out of business — the state can't compel you to continue operating a business at a loss — but the Ellis Act is often abused by real estate speculators. With no intention of operating the business, they buy a functioning rental property, evict the tenants, and then sell off the apartments as condos (subject to strict limitations) or as TIC units (with far fewer limits). In the corporate world, "raiders" will buy a company and sell off the parts of its business for more than the intact company is worth. The same principle applies with Ellis Act evictions, except that ordinary people are kicked out of their homes in the process.

I attended a protest yesterday, focusing specifically on one Ellis Act case, but also addressing the broader issue of squeezing more low- and middle-income renters out of the city of San Francisco.

Read more... 1530 McAllister Street is a 7-unit apartment building. The current tenants include an 89-year-old (a tenant for 30 years), a 68-year-old (over 25 years in the building), a family with two young children, and another family with a child who just turned 3 weeks old yesterday. None of the tenants has given the landlord any just cause to evict, except for the Ellis Act. Several of the tenants will probably have to relocate outside the city, because affordable housing in San Francisco is difficult to find — even by our city's alarmingly loose definition of "affordable."

I saw a graffito [singular of graffiti] in Berkeley about 15 years ago that said, "Affordable housing is a right; a landlord's profit is not." It shouldn't surprise you to learn that various specifically Maoist slogans appeared alongside. A landlord does have a right to make a profit, but that right must be balanced against the tenants' right to home security. Indeed, there are many jurisdictions — most of them well to the right of Chairman Mao — in which a tenant's right to his or her home is recognized on a comparable basis to a homeowner's right. Home ownership is a part of "the American dream," but for about three quarters of the citizens of San Francisco, buying a home falls into the category of "when I win the Lotto."

The specifics of 1530 McAllister also highlight the abusive, speculative nature of many Ellis Act evictions. One of the buyers of the property, Elba Borgen, has already "gone out of business" four separate times, kicking out responsible tenants each time in order to turn a fast profit from converting the building into TICs. It takes a special kind of chutzpah to make your living by repeatedly going out of business. Real estate experts estimate that an empty building is worth 20% more than an occupied building, just by virtue of being rid of those pesky tenants.

Yesterday's protest featured about two dozen people, including union members, seniors, students, and even a couple of people who got off the bus to join the rally. No one thought to bring a megaphone, but we shouted our slogans, sang a few songs, and waved our signs at passing traffic, a good many of whom honked in support of our cause. There was some media coverage, even apart from The Third Path: KTVU channel 2, The San Francisco Examiner, The Bay Times, and The San Francisco Sentinel all had reporters present. The biggest media draw was San Francisco Supervisor Ross Mirkarimi, in whose district 1530 McAllister is located. Other players included Joe O'Donoghue, head of the Residential Builders Association, Raquel Fox from the Tenderloin Housing Clinic, perennial activist Tommy Avicolli-Mecca, the San Francisco Tenants Union. The only disturbance in the protest was a drunk homeless man who kept shouting non sequiturs, apparently in the hope that someone would bribe him to leave. Also in attendance was a woman who was Ellis Act evicted last year by Elba Borgen, the very same real estate speculator.

The core of the message is that any tenant in California could be driven from your home, no matter your circumstances, if a real estate speculator is greedy enough, heartless enough, and amoral enough to set his or her sights on your building. We need to do something to curtail Ellis Act abuses.